Settlement Agreement Solicitors

This is because, as an employee you have the protection of employment law regarding your relationship with your employer. A settlement agreement is in some respects a waiver which prevents you from being able to access that protection in the future, often in return for a sum of money agreed between you and your employer.

You need to receive independent legal advice before agreeing to this, to be sure that you understand the process and what it means for you and for the employer to be able to rely on the terms of the agreement.

It is important for employees to know that just because a settlement agreement has been offered, you do not have to sign it if you don’t want to and do not agree to its terms. You may wish to try and negotiate more favourable terms.

For the employee, a settlement agreement often entitles them to an agreed sum of money in return for agreeing to not further pursue a case against their employer. There are many reasons why such an agreement may be produced, some of which can arise from the employee being at fault while others may relate to an employer neglecting an obligation or being at fault. That is why it is so important to seek legal advice to understand if the settlement is fair.

For the employer, a settlement agreement allows them to close the book on an issue or complaint, safe in the knowledge that the employee in question cannot legally pursue any further action against them for the matters covered by the agreement.

In short, a settlement agreement details the issues about which an employee can no longer make a formal or legal claim against their employer – giving the employer a legal and reasonable means of drawing a line under a situation which might otherwise escalate in terms of both cost and stress. Often this may include a payment, but it may see an otherwise bigger problem disappear.

Seeking the legal advice and support of settlement agreement solicitors, is important so that employers understand the financial and legal implications which frame their negotiations, and then to ensure that the correct procedure is followed and documentation produced to provide the best possible protection.

There are a range of reasons why a settlement agreement could be offered. Sometimes it may be necessary to record the settlement of a contentious issue in a way that allows the employment relationship to continue. Often it will relate to a termination of employment, whether that will be voluntary or forced through dismissal.

It’s important to recognise that every case is unique and independently handled by our employment law solicitors.

Some examples of when a settlement agreement might be offered:

• As part of the redundancy process, when an employee is being let go from their job.
• As a fast track method for removing an employee whose work is not up to scratch. This could also be referred to as a disciplinary settlement agreement.
• If a lack of skill or unforeseen sickness means an employee cannot carry out their role effectively.
• In the face of a working relationship breakdown, when employee and employer cannot work together.
• If a grievance has been raised by the employee against their employer.

These examples are not exhaustive, but form some of the most common reasons when settlement agreements might be implemented.

A settlement agreement will normally include a payment by the employer to the employee as well as them giving their employee an agreed reference to help them progress their career elsewhere.  In exchange, the employee will agree to give up their right to bring a claim against the employer in relation to the issues detailed in the settlement agreement. On top of this, a settlement will usually include a confidentiality clause as part of the deal so that the employee can’t tell others about the settlement that they’ve agreed with their employer.

It’s important to recognise that every case is unique and independently handled by our employment law solicitors.

Some examples of when a settlement agreement might be offered:

• As part of the redundancy process, when an employee is being let go from their job.
• As a fast track method for removing an employee whose work is not up to scratch. This could also be referred to as a disciplinary settlement agreement.
• If a lack of skill or unforeseen sickness means an employee cannot carry out their role effectively.
• In the face of a working relationship breakdown, when employee and employer cannot work together.
• If a grievance has been raised by the employee against their employer.

These examples are not exhaustive, but form some of the most common reasons when settlement agreements might be implemented.

You may find that the employer chooses to take another course of action, or may readdress aspects of the agreement and present a new version for your approval.

This is an important decision and your employer will actually require you to consult and receive expert legal advice before signing an agreement.

If the employee is in breach of contract

If an ex-employee is found to be in breach of the terms of a settlement agreement, then the remedies available to their former employee will depend on the circumstances of and nature of their breach. For example, failing to return employer property by a set date will be dealt with in one way, while breaking the terms of the settlement in relation to confidential information being shared might lead the employer to pursue legal action, perhaps for an injunction and compensation.

If the employer is in breach of contract

If the ex-employer is found to be in breach of the terms of a settlement agreement, the employee may be able to seek an injunction for specific performance of the terms of the agreement and possibly claim damages.

We always work within the budgetary restraints of our client and taking account of the level of employer contribution and the scope of work involved.

Such payments and the timeline in which they will be made should all be set out in any settlement agreements.

Having said that, the tax implications of a settlement agreement needs to be considered carefully as tax can have a huge impact on the amount that you receive, so this is something you should discuss with an expert before proceeding with any agreement.